How do PBMs make money?

A helpful article from Mattingly et al. (2023) describes history, business practices, economics, and policy for pharmacy benefit managers (PBMs). Part of this article explains how PBMs make money. They claim there are three primary avenues. Rebate retention. Plan sponsors pays the list price of the drug net of rebates and discounts received.  PBMs are…

Impact of 340B on the use of biosimilars

Biosimilar drugs for biologic treatments are analogous to generic drugs for branded small molecules. Switching to biosimilars after biologic patent expiry can save payers and patients money. Why doesn’t it happen more often? There are a variety of reasons but a paper by Bond et al. (2023) argues that the 340B program incentivizes hospitals to…

What is better: public or private provision of health care?

This is a question that can be answered empirically but doing so is challenging. While cross-country comparisons are feasible for comparing public and private health care provisions, often there are many other differences between health care systems across country. Within any given country, there is significant selection bias in terms of who receives public vs.…

The Corporatization of Independent Hospitals

That is the title from an interesting paper by Andreyeva et al. (2023). The abstract is below: Between 2000 and 2020, the share of US hospital bed capacity under multi-unit firms (systems) increased from 58% to 81% – a rapid corporatization of a sector with $1.3 trillion in annual spend. However, little is known about…

How does changing capitation share impact service provision in mixed reimbursement environments?

There has been much research showing that fee-for-service (FFS) leads to increased provision of medical services and capitation leads to decreased provision of medical services. My own research shows that there are system-wide effects and that the impact of capitation for primary care physicians on services may depend on whether specialists are also reimbursed via…

Does the 340B program improve quality of care?

According to a paper by Smith et al. 2023, the answer is ‘no’. The authors use data from AHRQ’s Healthcare Cost and Utilization Project (HCUP) State Inpatient Data, Hospital Cost Reporting Information System Data, Office of Pharmacy Affairs Information System Data, and American Hospital Association Annual Survey for 15 states between 2008 to 2014. The…

Labor Day post: Economic Impact of Nursing

From Brownie et al. (2017): Healthcare access impacts almost every human indicator including maternal/child mortality rates, rates of preventable infectious and noncommunicable disease, employability, gender equality, workforce productivity, trends in mortality rates and more… Several hospital-based studies can be cited to illustrate nursing impacts; for example, increasing the ratio and educational level of nursing staff…

Wound-Specific Oral Nutritional Supplementation Can Reduce the Economic Burden of Pressure Injuries for Nursing Homes

My paper with co-authors Shanshan Wang and Kirk Kirr just came out in the Journal of Long-Term Care titled Wound-Specific Oral Nutritional Supplementation Can Reduce the Economic Burden of Pressure Injuries for Nursing Homes: Results from an Economic Model. The abstract is below. Background To measure the cost savings and staff time savings of wound-specific…